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Where to look for finance

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  • 02-01-2021 10:35am
    #1
    st1979
    Registered Users Posts: 936 ✭✭✭


    I have a site in a regional town centre with planning for apartments. Site has no debt. Apartments can be rented to council long term for 20 years.
    I am being told by brokers my problem is site is too small for most lenders. As I would only need 400 to 500k to build. Most development finance is only aimed at 1m plus. Some do 500k but being a regional town puts some off.
    I have a building company and would probably like to retain ownership of apartments in company and refinance long term once built. Rental gross would be approximately 3500 per month.
    Any ideas where I should look


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    #2
    Darc19
    Registered Users Posts: 3,817 ✭✭✭Darc19


    I looked at something similar last year for a site in Kildare. We didn't proceed as we are looking at changing planning.

    ICS were one option as it was a pension investment scheme but a lot of hoops to jump through and I got the impression that they were not overly interested.

    Property Bridges was the most realistic option, but was relatively costly, however once the construction was finished it could be remortgaged with ICS at a better rate.

    A good financial advisor is what is needed as there may be a pension angle to it that could make it very financially rewarding.

    https://www.propertybridges.com/development-finance/


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    #3
    st1979
    Registered Users Posts: 936 ✭✭✭st1979


    Darc19 wrote: »
    I looked at something similar last year for a site in Kildare. We didn't proceed as we are looking at changing planning.

    ICS were one option as it was a pension investment scheme but a lot of hoops to jump through and I got the impression that they were not overly interested.

    Property Bridges was the most realistic option, but was relatively costly, however once the construction was finished it could be remortgaged with ICS at a better rate.

    A good financial advisor is what is needed as there may be a pension angle to it that could make it very financially rewarding.

    https://www.propertybridges.com/development-finance/

    Thanks for that. Hadn't taught of the pension angle


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    #4
    antoinolachtnai
    Registered Users Posts: 9,793 ✭✭✭antoinolachtnai


    You are really looking for project finance (i.e., to finance the development part of the risk). It is unlikely that a pension fund is going to project finance something like this. If they are interested in anything, they are interested in owning the units and getting the regular income from the local authority. They are not going to be interested in owning a few units and you owning the rest. It's just too small.

    And you really need to end up owning this to provide for your own pension!

    There might be some individual who would be willing to finance it from their personal pension if they have an appetite for risk, who knows?

    The chances are you already know whomever is going to finance this for you, or someone you know is going to introduce you to them. I would think through your local authority contact, your QS, your builders providers, your architect or engineer and business people in the town to see who might want to put up the cash.

    Realistically, it is going to be expensive to finance this by the time you go through all the legal and QS palaver.

    You would be well advised to get tax advice as to the best way to structure the whole endeavour as well as the financial advice suggested.


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